Babylon Pays $3.6M for Matrix Hydro Services to Boost Water Capabilities
Babylon Pump & Power is set to acquire Matrix Hydro Services, enhancing its water management capabilities in Western Australia’s mining sector, supported by a $3.5 million entitlement offer.
- Acquisition of Matrix Hydro Services strengthens Babylon’s water management portfolio
- Upfront $2.5 million payment with potential $1.1 million deferred based on FY26 EBITDA
- Matrix founders join Babylon’s management, boosting technical expertise
- Babylon launches $3.5 million Accelerated Non-Renounceable Entitlement Offer (ANREO)
- Strategic move completes integration vision following prior RWG acquisition
Strategic Acquisition to Expand Water Services
Babylon Pump & Power Limited (ASX: BPP) has announced a binding agreement to acquire Matrix Hydro Services Pty Ltd, a specialist in aquifer testing and groundwater management based in Western Australia. This move is designed to bolster Babylon’s capabilities in delivering integrated water management solutions to Tier 1 mining clients, a sector where water diagnostics and management are critical.
The acquisition involves an upfront consideration of $2.5 million, split between cash and shares, with an additional $1.1 million deferred payment contingent on Matrix achieving forecast EBITDA targets for FY26. This pricing reflects a conservative valuation multiple of approximately 3.27 times forecast EBITDA, underscoring Babylon’s disciplined approach to growth.
Enhancing Technical Depth and Market Position
Matrix Hydro Services, founded in 2021 by industry veterans Blair McDiarmid and Michael Townley, brings decades of hydrogeological expertise and a strong reputation for high-integrity aquifer testing and groundwater monitoring. Their services are pivotal in shaping dewatering strategies and environmental compliance for large-scale mining operations.
Importantly, both founders will join Babylon’s executive team, enhancing the group’s technical leadership and ensuring continuity of client relationships. This integration completes the strategic vision initiated with Babylon’s 2022 acquisition of Resource Water Group, effectively consolidating key players in the Western Australian water services market.
Funding Growth Through Capital Raising
To finance the acquisition and support working capital needs, Babylon is launching an Accelerated Non-Renounceable Entitlement Offer (ANREO) to raise approximately $3.5 million. The offer is priced at $0.004 per share, with a ratio of seven new shares for every twenty held. Major shareholders, including Belgravia Strategic Equities and Resource Water Group, have committed to take up their entitlements, signaling strong insider confidence.
This capital raise not only funds the Matrix acquisition but also positions Babylon for further disciplined, debt-funded acquisitions as part of its broader inorganic growth strategy. The company emphasizes maintaining sustainable leverage metrics while expanding its footprint and service offerings.
Outlook for Integrated Water Management Services
With Matrix’s addition, Babylon aims to become a full-service provider in dewatering, aquifer diagnostics, and water project management. The combined expertise and client base enhance Babylon’s competitive positioning in Western Australia’s resource sector, where water management is increasingly critical amid environmental and regulatory pressures.
Babylon’s CEO Michael Shelby expressed optimism about the acquisition’s value accretion and the strengthened ability to deliver insight-driven, high-integrity water solutions. The move reflects a strategic commitment to serving major resource developers with bundled diagnostic and rental solutions tailored to complex project needs.
Bottom Line?
Babylon’s Matrix acquisition and capital raise mark a decisive step in consolidating water management services for WA’s mining sector, setting the stage for further growth.
Questions in the middle?
- Will Matrix meet its FY26 EBITDA targets to trigger the deferred payment?
- How effectively will Babylon integrate Matrix’s operations and management team?
- What are Babylon’s next acquisition targets in its inorganic growth strategy?
